#peter marcuse

Middle class homeowners may feel that their residential situation reflects their talents and achievements. But they are still living within an inhumane housing system–they have simply used their resources to construct a more livable corner within it. As we have seen, this solidity could melt in an instant. And their position is more reflective of their place in an unequal social structure than anything having to do with either their personal virtues or their housing.

Whether we dwell in caves or in condominiums, housing is a universal human practice. Home is an extension and expression of our capacity to create. It takes an infinite variety of forms, but making a home for ourselves is an essential and universal activity. Residential alienation is what happens when a capitalist class captures the housing process and exploits it for its own ends. Hyper-commodified housing is alienated housing. It is dominated by people who see dwellings through the eyes of an investor interested in profit or a technocrat interested in control, instead of seeing it as a social right. Commodified dwelling space is not an expression of the residential needs of those who live in it. It is determined by landlords, sublessors, management companies, real estate developers, banks, bailiffs, and bureaucrats–by the ensemble of social roles and institutions that prop up the seemingly inhuman laws of housing markets in contemporary society.

The solution to the housing problem, then, is not moralism, but the creation of an alternative residential logic. Exhorting for-profit real estate companies to act differently in the name of creating a less vicious housing system is pointless. Housing problems are not the result of greed or dishonesty. They result from the structural logic of the current housing system. Alternative, decommodified models of residential development must therefore be created. Far from stopping new construction, cities need more new decommodified dwellings, such as public or cooperative housing. A proper understanding of the housing crisis today requires an account of its commodification. Making real progress on housing problems requires developing concrete alternatives to it.

In The Great Transformation, Karl Polanyi demonstrated that "the idea of a self-adjusting market implied a stark utopia. Such an institution could not exist for any length of time without annihilating the human and natural substance of society." The idea of a self-adjusting housing market is similarly utopian. In unequal contexts where the logic of commodification rules, some people will always be forced into uninhabitable dwelling spaces. Some will live in sheds, some in closets. Some will live amid toxic pollution. Some will be packed with twenty-five other people, including children, into a single home. These are not market failures--they are how the market works.

It my be true that, all things remaining equal, enlarging supply while keeping demand constant would lead to lower prices. But stated that way, the claim is too abstract. All other things would not remain equal. Promoters of free-market housing solutions never consider the costs and consequences that would result from attempting to establish a purely self-regulating market in housing.  Setting up the conditions for frictionless exchange and unlimited development could in theory create a situation where the price of housing falls until it is affordable to everyone including the lowest paid workers. But trying to reach that point would entail overturning the existing residential landscape. It would mean displacement on an immense scale. It would make it easier for landlords to threaten, harass, and exploit tenants. It would lead to huge increases in residential segregation. It would encourage shoddy, dangerous conversions and environmental degradation. It would lead to the proliferation of under-maintained, overcrowded, dangerous dwellings; such buildings were pervasive during the heyday of laissez-faire housing in the late nineteenth century. The idea that tenants in a fully unregulated market could avoid such harmful conditions just by exercising consumer choice is naive. And it is unrealistic to imagine that there would not be some countermovement in response.

There is a world of a difference between economic demand and social need. Many people, especially poor and working-class households, need more housing than they can afford. But this form of need does not register with purely profit-oriented developers. Far from responding efficiently to residential needs, investors can turn a profit by squeezing more money out of existing spaces while adding nothing to the general housing stock. Developers routinely engage in land hoarding and other strategies centered on speculation and scarcity. Even some economists recognize that housing markets are structurally incapable of being efficient. It is easy to inflate price bubbles and difficult to deflate them. The history of real estate is replete with speculation. Despite how it appears in abstract models, the actual market in housing is neither efficient nor rational.

When housing becomes a globalized, financialized commodity, the gulf widens between the price signals to which markets respond and the actual social need for dwelling space. Investment firms chasing short-term gains reorient the housing system away from local residential needs and disconnect prices from wages in local labor markets. Transnational speculation begins to shape what gets built, where it appears, and who can afford to live in it. We see this happening in cities like London and Vancouver, home to increasing numbers of apartments that are ill-suited to the families who need to live in them but easily sold to investors who live abroad.